Gap Inc. named Michael Francis as the new chief executive of its Old Navy division, effective November 2, in an effort to reverse recent sales weakness at the retailer’s largest revenue contributor. Francis, who joined Old Navy as chief customer officer in May, will replace Haio Barbeito, who has led the banner since 2022 and will transition to an advisory role.
The leadership change came after Old Navy reported net sales of $2.1 billion in the company’s fiscal second quarter, representing a 4% decline year over year. Comparable sales also fell 4%, worse than Wall Street expectations of a 2.4% decline. The company attributed the shortfall partly to an unexpected drop in customer traffic and acknowledged that summer marketing efforts lacked direct product messaging. Old Navy generates approximately 60% of Gap’s total revenue.
Gap’s chief executive Richard Dickson characterized the transition as a planned move to position Old Navy for accelerated growth while maintaining existing strategy. Francis stated the brand would sharpen its customer focus, strengthen cultural relevance, and enhance the shopping experience across all channels. Dickson noted that Old Navy had already begun showing “significant improvement” in traffic and sales in recent weeks.
Overall, Gap’s fiscal second-quarter results were mixed. The company beat earnings expectations at $1.38 per share on net income of $501 million but fell short on revenue expectations with sales reaching $3.65 billion. The Gap banner itself performed strongly with comparable sales rising 10%, while Banana Republic saw 3% comparable sales growth. Athleta, however, declined 12% in comparable sales. Gap narrowed its full-year net sales growth outlook to between 1% to 1.5% but raised adjusted earnings per share guidance to a range of $2.35 to $2.45, partly benefiting from approximately $512 million in tariff refunds.
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